By MELODY M. AGUIBA
The country’s Early Harvest (EH) deal with China, which puts tariff of 209 products to zero effective Jan. 1, 2006, may increase the Philippines’ banana, coconut, and mango export, although this growth is uncertain and must be seen in light of any adverse effect on other farm products.
The memorandum of understanding (MoU) signed by then Trade Secretary Juan B. Santos and Chinese Commerce Minister Bo Xilai last April 27 during Chinese President Hu Jintao’s visit to the Philippines is hoped to raise the country’s tropical fruit exports to China.
But fruit exporters are uncertain if the EH free trade deal will really raise the volume of existing tropical fruits to China considering that banana production in the Philippines has not been coping with market demand in China over the last two years. Banana exports to China has an average of approximately 17 percent tariff before the EH deal effectivity.
"The problem with banana is you don’t have the volume. All the boats that go to China are underloaded for the last two years because China is just a Class B market. Exporters want to ship first to the higher-priced Class A market in Japan. In China it’s just about $5 per box," an exporter said.
Nevertheless, the Philippines may still be able to raise volume of China banana exports since it will have a price advantage over South American banana exporters that do not enjoy zero tariff. The country’s banana export to China takes up approximately 15 percent of the Philippines two million metric ton banana export worth about $350 million yearly.
Some mango exporters are reportedly checking shipment procedures direct to China as they used to export to China only via Hongkong, but even the direct shipment may have freight cost disadvantage.
"There is an idea that demand for our mango in China may increase. But we may even have savings shipping through Hongkong cause you can use a dry container to Hongkong over 36 hours, freight cost is only $300 for 700 boxes. But if you send it to China, you need refrigeration for three to four-day shipment costing $800 for 800 boxes. It’s more than double," the official said.
The irony here, he said, is the Philippines has long been shipping mangoes to Hongkong at zero duty, and yet export volume has been shrinking. Besides, the Philippines’ mango export to the Class A Japan market has not been rising due to an already high mango price of $14 per box.
AT least, the Philippines may win with the EH a bigger export volume for coconut products—copra, crude oil, cocoa powder, palm kernel—which China does not abundantly have.
But fisheries may be affected since certain fishes, like the skipjack, is not being eaten in China and may be dumped to the Philippines. At 2,000 to 3,000 yuan, skipjack may just have a landed cost of
P20 per kilo here while local skipjack costs about P60 per kilo.
"Anyway, that may only affect the local fish market during the off season," he said.
Another worrisome EH deal provision is the anticipated immediate completion of a pest risk analysis on China’s vegetables that will soon open up the country’s market for China’s carrots, cabbages, gingers, and potatoes.
And yet, Chinese carrots may only be competitive with the Benguet carrot production during off season in July since China carrots may be as high as
P25 per kilo while the local carrots may just cost P12 per kilo.
On onion, the Philippines really needs to occasionally import permit for Chinese onions, otherwise, consumers can suffer from a high onion cost of
P40 to P60 per kilo while Chinese onion may just be at P20 per kilo. 
